SINGAPORE – Reuters: Global oil prices fell yesterday, Friday, by more than one percent, to continue for the third consecutive day, incurring losses and heading towards the second monthly decline, due to the growing fears that the rise in Covid-19 infections in Europe and the United States may harm fuel consumption.
Yesterday morning, the global benchmark Brent crude futures fell 51 cents, or 1.4 percent, to $ 37.14 a barrel, after touching the lowest level in five months in the previous session.
The price of the US benchmark (West Texas Intermediate) crude contract fell 48 cents, or 1.3 percent, to $ 35.69 a barrel, after falling yesterday to its lowest level since June.
“In light of a European slowdown threatening global consumption and the return of Libya’s production, the onus must now fall on OPEC + to reconsider increasing its production by two million barrels per day in January / January”.
He added that it is unlikely that oil prices will maintain any rise in this climate that lacks any statement from the “OPEC +” group.
The group is expected to produce 2 million barrels per day in January as part of their production deal.
But Saudi Arabia and Russia, two major producers, support maintaining the group’s production cuts of about 7.7 million barrels per day currently next year, with the threat of renewed isolation measures in Europe to slow demand again.
On the other hand, a Reuters poll revealed on Friday that oil prices will hover in a range between 40 and 45 dollars a barrel for the rest of the year, while analysts expect a bumpy road to recovery in 2021, with the acceleration of the Corona virus outbreak fueling concerns about demand again.
A survey of 41 economists and analysts predicted that the global benchmark Brent crude oil prices would reach $ 42.32 on average in 2020, slightly down from the forecast of $ 42.48 in the previous poll and $ 42.45 on average since the beginning of this year.
The forecast for 2021 was also reduced to $ 49.76 a barrel from last month’s average of $ 50.41.
Analysts say the resumption of Libyan supplies may put further pressure on prices, as markets prepare for the US presidential election on November 3.
“The two main factors remaining in 2020 that could break the current scope are the US elections and surprising good news about the vaccine,” said David Olsant, an analyst at Raiffeisen Consulting.
He added, “Biden’s victory may raise concerns on the supply side of shale oil, but a more lenient policy towards Iran may raise concerns about excess supplies.” The survey expects US West Texas Intermediate crude futures to average $ 38.53 a barrel in 2020, compared to an average of $ 38.70 in September.
“Production has increased again recently, and with the stabilization of the situation in Libya, an important oil exporter may regain its former strength,” said Carsten Fritsch, an analyst at the German “Commerzbank” bank in the United States.
But the International Energy Agency says a second wave of COVID-19 is slowing demand and hindering producers’ efforts to balance the market.
Giovanni Stonuvo, an analyst at the Swiss bank UBS, said that while the recovery in demand continues, it will be uneven and at a slower pace in the coming months, until an effective vaccine for the Covid-19 epidemic becomes widely available.
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